Companies

Shoe firm slips into negative equity

shoe

The firm reported in its financials that shareholder funds stood at a negative Sh42.2 million at the end of September, compared to a positive Sh30.1 million at the same period last year. FILE PHOTO | NMG

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Summary

  • The firm reported in its financials that shareholder funds stood at a negative Sh42.2 million at the end of September, compared to a positive Sh30.1 million at the same period last year.
  • This was in spite of a drop in net losses, which had stood at Sh14.9 million in the six months ended September 2017, largely due to cost cutting.

Shoe retailer Nairobi Business Ventures (NBV) has fallen into negative equity after recording a net loss of Sh9.5 million in the six months to September, this year, amid rising debt.

The firm reported in its financials that shareholder funds stood at a negative Sh42.2 million at the end of September, compared to a positive Sh30.1 million at the same period last year.

This was in spite of a drop in net losses, which had stood at Sh14.9 million in the six months ended September 2017, largely due to cost cutting.

Borrowings rose by Sh30 million to Sh94.3 million in the period to push up liabilities, while on the asset side the firms stock (inventory) fell by Sh24 million to Sh50.6 million.

NBV has blamed its performance on several factors, including a delay in securing additional capital to finance its working capital requirements and weak consumer spending.

NBV’s management said the company had been hit by turbulence affecting the retail sector, where sales have generally been hurt by economic hardship that has hit the country.

“The period under review was a turbulent one for NBV alongside many others in retail and fashion sectors in Kenya. This was the period NBV continued making losses due to very low sales turnover due to economic slowdown and low purchasing power,” said the company in a statement.

“NBV management has taken steps to support working capital needs of the company by way of convertible short term notes as a short-term measure, and exploring possibility of raising long-term capital to support the revival of the company’s performance and continued expansion.”